Saturday, July 23, 2011

Summary: The fuzzy math embedded within the 1983 Social Security reform legislation has been exposed with the realities of 2011. Still the game goes on as politicians from both parties spin the outcome to their own liking.

Congressman Ron Paul may be a long shot to win the Republican presidential nomination, but he runs competitively with President Obama right now.

The latest Rasmussen Reports national telephone survey of Likely Voters shows Paul picking up 37% of the vote, while the president earns 41%. The Texas congressman joins Mitt Romney, Michelle Bachmann, and Rick Perry as candidates within hailing distance of the president at this time.

Rudy Giuliani is another potential candidate who is considered a long shot for the nomination but is competitive with the president. The former mayor of New York City trails Obama by five, 44% to 39%.

But the real story in the numbers is that the president continues to earn between 41% and 49% of the vote no matter which Republican is mentioned as a potential opponent. This suggests that the race remains a referendum on the incumbent more than anything else.

Debate over the debt ceiling has reached a fever pitch in recent weeks, with each side trying to outdo the other in a game of political chicken. If you believe some of the things that are being written, the world will come to an end if the U.S. defaults on even the tiniest portion of its debt.

In strict terms, the default being discussed will occur if the U.S. fails to meet its debt obligations, through failure to pay either interest or principal due a bondholder. Proponents of raising the debt ceiling claim that a default on Aug. 2 is unprecedented and will result in calamity (never mind that this is simply an arbitrary date, easily changed, marking a congressional recess). My expectations of such a scenario are more sanguine.
The U.S. government defaulted at least three times on its obligations during the 20th century.

-- In 1934, the government banned ownership of gold and eliminated the right to exchange gold certificates for gold coins. It then immediately revalued gold from $20.67 per troy ounce to $35, thus devaluing the dollar holdings of all Americans by 40 percent.

-- From 1934 to 1968, the federal government continued to issue and redeem silver certificates, notes that circulated as legal tender that could be redeemed for silver coins or silver bars. In 1968, Congress unilaterally reneged on this obligation, too.

-- From 1934 to 1971, foreign governments were permitted by the U.S. government to exchange their dollars for gold through the gold window. In 1971, President Richard Nixon severed this final link between the dollar and gold by closing the gold window, thus in effect defaulting once again on a debt obligation of the U.S. government.

Unlimited Spending

No longer constrained by any sort of commodity backing, the federal government was now free to engage in almost unlimited fiscal profligacy, the only check on its spending being the market’s appetite for Treasury debt. Despite the defaults in 1934, 1968 and 1971, world markets have been only too willing to purchase Treasury debt and thereby fund the government’s deficit spending. If these major defaults didn’t result in decreased investor appetite for U.S. obligations, I see no reason why defaulting on a small amount of debt this August would cause any major changes.

The national debt now stands at just over $14 trillion, while net total liabilities are estimated at over $200 trillion. The government is insolvent, as there is no way that this massive sum of liabilities can ever be paid off. Successive Congresses and administrations have shown absolutely no restraint when it comes to the budget process, and the idea that either of the two parties is serious about getting our fiscal house in order is laughable.

Boom and Bust

The Austrian School’s theory of the business cycle describes how loose central bank monetary policy causes booms and busts: It drives down interest rates below the market rate, lowering the cost of borrowing; encourages malinvestment; and causes economic miscalculation as resources are diverted from the highest value use as reflected in true consumer preferences. Loose monetary policy caused the dot-com bubble and the housing bubble, and now is causing the government debt bubble.

For far too long, the Federal Reserve’s monetary policy and quantitative easing have kept interest rates artificially low, enabling the government to drastically increase its spending by funding its profligacy through new debt whose service costs were lower than they otherwise would have been.

Neither Republicans nor Democrats sought to end this gravy train, with one party prioritizing war spending and the other prioritizing welfare spending, and with both supporting both types of spending. But now, with the end of the second round of quantitative easing, the federal funds rate at the zero bound, and the debt limit maxed out, Congress finds itself in a real quandary.

Hard Decisions

It isn’t too late to return to fiscal sanity. We could start by canceling out the debt held by the Federal Reserve, which would clear $1.6 trillion under the debt ceiling. Or we could cut trillions of dollars in spending by bringing our troops home from overseas, making gradual reforms to Social Security and Medicare, and bringing the federal government back within the limits envisioned by the Constitution. Yet no one is willing to step up to the plate and make the hard decisions that are necessary. Everyone wants to kick the can down the road and believe that deficit spending can continue unabated.

Unless major changes are made today, the U.S. will default on its debt sooner or later, and it is certainly preferable that it be sooner rather than later.

If the government defaults on its debt now, the consequences undoubtedly will be painful in the short term. The loss of its AAA rating will raise the cost of issuing new debt, but this is not altogether a bad thing. Higher borrowing costs will ensure that the government cannot continue the same old spending policies. Budgets will have to be brought into balance (as the cost of servicing debt will be so expensive as to preclude future debt financing of government operations), so hopefully, in the long term, the government will return to sound financial footing.

Raising the Ceiling

The alternative to defaulting now is to keep increasing the debt ceiling, keep spending like a drunken sailor, and hope that the default comes after we die. A future default won’t take the form of a missed payment, but rather will come through hyperinflation. The already incestuous relationship between the Federal Reserve and the Treasury will grow even closer as the Fed begins to purchase debt directly from the Treasury and monetizes debt on a scale that makes QE2 look like a drop in the bucket. Imagine the societal breakdown of Weimar Germany, but in a country five times as large. That is what we face if we do not come to terms with our debt problem immediately.

Default will be painful, but it is all but inevitable for a country as heavily indebted as the U.S. Just as pumping money into the system to combat a recession only ensures an unsustainable economic boom and a future recession worse than the first, so too does continuously raising the debt ceiling only forestall the day of reckoning and ensure that, when it comes, it will be cataclysmic.

We have a choice: default now and take our medicine, or put it off as long as possible, when the effects will be much worse.

The United Nations is preparing to finalize its Arms Trade Treaty in 2012, better known in the United States as the Small Arms Treaty, after a series of talks in the Third Preparatory Committee took place last week. The final talks on the treaty have been scheduled for four weeks next summer, and new rules indicate that a majority vote is not necessary in order for the treaty to be passed. The Heritage Foundation contends that though the stated purpose of the treaty is to “address the absence of commonly agreed international standards for the transfer of conventional arms, which, it is argued, contribute to war, crime, and terrorism,” the treaty poses a threat to American liberties and interests.

Throughout the talks on the treaty, members of the UN Security Council — which includes China, France, Russia, the United Kingdom, and the United States — voiced concerns over the establishment of a supranational authority. Security Council members and the European Union have now managed to eliminate the presence of that supranational authority originally designated by the treaty, replacing it with a more general statement of obligations related to arms trade which are to be fulfilled nationally, not globally.
The Heritage Foundation sees this as one positive step:

This rejection of a supranational authority is an important concession to sanity. Since the U.S. already has a substantial body of regulations on the arms trade, it would not — if the treaty has only general requirements — have to pass significant implementing legislation to comply with the treaty if the U.S. signs and the Senate ratifies it. Even more importantly, the emphasis on national responsibility reduces the opportunities for U.N. member states to use a U.N. authority to distort the treaty, apply it unfairly, or creatively reinterpret its meaning.

Whether this remains the case by next year when nations meet once again to finalize the details of the treaty is anyone’s guess. But some note a number of the treaty's remaining problems. For example, the Heritage Foundation observes, “Since Russia and China have long been skeptical of any arms trade treaty, their willingness to support it now implies that the treaty will have no practical effect on their conduct.”
Likewise, while a supranational authority has been rejected, the European Union continues to call for the establishment of an Implementation Support Unit, which some contend may grow to be too powerful and costly.
Additionally, most gun advocates say the scope of the treaty is far too large, regulating areas such as manufacturing technology, ammunition, small arms, aircraft carriers, and others. They argue that the treaty also has the potential to impact arms used for sporting and hunting, which they note is a direct violation of Second Amendment rights.Read the entire article

The Presidential Elections are drawing near for 2012, and according to a study released recently by the Center For Responsive Politics, Obama is calling on the "White Shoe Boys" of Wall Street ( As Gerald Celente calls them)to fund his upcoming re-election campaign this year, only this time he is ramping up his efforts even more than he had in the 2008 campaign, revealed in a CNBC report.

According to the Washington Post, corporations that gave generously to the Obama campaign include:

Goldman Sachs Group $126,713

MF Global $122,650

Comcast $114,895

Creative Artists Agency $ 112,900

The Wentworth Group $ 85,800

Over one-third of the money raised by Obama's fundraising machine has come from the financial sector.
"Individuals who work in the finance, insurance, and real estate sector are responsible for raising at least $11.3 million for Obama's campaign and the Democratic National Committee," the report says.

But, just like the classic banking families that financed both sides of wars in the past, the White Shoe Boys also finance both parties in order to hedge their bets, so to speak, by financing Mit Romney even more generously:

Goldman Sachs Group $ 238,250

Credit Suisse $ 157,000

Morgan Stanley $ 113,700

Vivint $ 71,000

PricewaterhouseCoopers $ 69,500

Bank of America / Merril Lynch $ 59,200

Of course at the top of both Romney and Obamas' list is none other than the Goldman Sachs Boys who must have thought it their loyal duty to give back to the "two headed - one party system" that so readily gave them (at least) $ 10 billion in TARP money in 2009. Source: Catastrophe, Pg 76

The total amount raised by Obama's campaign dwarfs the $35 million raised by the Republican candidates in the last quarter combined. (Not including Michelle Bachman who has not yet reported her totals.)

Although the amount raised by Obama's team is astounding, his advisors are hoping to raise a total of $ 750 million for his re-election campaign in 2012.

Obviously his campaign will rely on much needed media propaganda (which can be quite expensive), as well as other tools that may cost handsomely. ( More monetary promises to companies, groups and organizations who will be willing to gather the masses to the voting booths again in 2012 under the pretense of more "change")?

I am most convinced that Obama is just the man the Globalists, Wall Street, and the Fed want again in 2012 - since he has been doing such a fine job under their direction - to complete the change of America from Freedom to Fascism.

The powers-that-be have used the “Shock Doctrine” to pass anti-American, fascist legislation while the public was in a state of shock.
This applies to economic shocks, as well as physical attacks like 9/11.
Indeed, right now, Paulson and Bernanke are using the shock doctrine to try to ram through legislation that would help out the fat cats at the expense of taxpayers, and give the government control over the free market.
But there is some resistance. For example, Senator Leahy and the New York Times are questioning Paulson’s use of shock and awe:

Senator Leahy said “If we learned anything from 9/11, the biggest mistake is to pass anything they ask for just because it’s an emergency”

“The rescue is being sold as a must-have emergency measure by an administration with a controversial record when it comes to asking Congress for special authority in time of duress.”***
Mr. Paulson has argued that the powers he seeks are necessary to chase away the wolf howling at the door: a potentially swift shredding of the American financial system. That would be catastrophic for everyone, he argues, not only banks, but also ordinary Americans who depend on their finances to buy homes and cars, and to pay for college.
Some are suspicious of Mr. Paulson’s characterizations, finding in his warnings and demands for extraordinary powers a parallel with the way the Bush administration gained authority for the war in Iraq. Then, the White House suggested that mushroom clouds could accompany Congress’s failure to act. This time, it is financial Armageddon supposedly on the doorstep.
“This is scare tactics to try to do something that’s in the private but not the public interest,” said Allan Meltzer, a former economic adviser to President Reagan, and an expert on monetary policy at the Carnegie Mellon Tepper School of Business. “It’s terrible.”

The Tarp bailouts were passed using apocalyptic – and false – threats. For example, as I’ve previously reported:

In retrospect, Congress felt bullied by Mr. Paulson last year. Many of them fervently believed they should not prop up the banks that had led us to this crisis — yet they were pushed by Mr. Paulson and Mr. Bernanke into passing the $700 billion TARP, which was then used to bail out those very banks.

Friday, July 22, 2011

Genetically engineered mice containing human DNA are already a mainstay of research into new drugs for diseases like cancer

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FOX News.com

July 23, 2011

Scientific experiments that insert human genes or cells into animals need new rules to ensure they are ethically acceptable and do not lead to the creation of "monsters," a group of leading British researchers said on Friday.

While humanizing animals in the name ofmedical research offers valuable insights into the way human bodies work and diseases develop, clear regulations are needed to make sure humanization of animals is carefully controlled.

Extreme scenarios, such as putting brain cells into primates to create talking apes, may remain science fiction, but researchers around the world are constantly pushing boundaries.

Chinese scientists have already introduced human stem cells into goat fetuses and U.S. researchers have studied the idea of creating a mouse with human brain cells -- though they have not actually done so.

Such controversial research needs special oversight, according to a report from Britain's Academy of Medical Sciences on the use of animals containing human material.

Using animals with limited humanized traits is not new. Genetically engineered mice containing human DNA are already a mainstay of research into new drugs for diseases like cancer.

But Martin Bobrow, a professor of medical genetics at theUniversity of Cambridge, who led the Academy's working group, said there were three areas of particular concern.

"Where people begin to worry is when you get to the brain, to the germ (reproductive) cells, and to the sort of central features that help us recognize what is a person, like skin texture, facial shape and speech," he told reporters.

His report recommends that government should put in place a national expert body, working within the existing system for regulating animal research, to oversee such sensitive areas.

British ministers said they welcomed the report and would consider its recommendations carefully.

Bobrow said other countries would need to follow suit with their own rules, as their scientists and regulators also recognized the need to address potential public concerns.

On July 9, 20,000 Malaysians gathered in Kuala Lumpur to demand more transparency in electoral laws in connection with next year's national elections.

Police unleashed tear gas and chemical-laced water on the demonstrators and temporarily detained nearly 1,700 of them. According to reports, authorities also detained six opposition activists without trial and accused them of trying to use the rally to spread communism. Police said they found T-shirts and other materials linked to communist figures.

Apparently, these measures didn't suffice for some of Malaysia's nervous ruling elite. The editors of Utusan Malaysia, owned by Prime Minister Najib Razak's United Malays National Organization ruling party (UMNO), defaulted to a time-tested maneuver: When in doubt, blame the Jews!

The Jews? Most citizens of the overwhelmingly Asian economic giant have never and will likely never meet a Jew in their lifetime. And yet the folks at Utusan Malaysia, which is influential among Muslims in rural areas who rely on government-linked media to shape their worldview, are apparently confident warnings about a "Jewish plot" would resonate in a land without Jews.

To understand why, you need only look at the track record of the man who dominated his nation for a quarter of a century, Malaysia's fourth prime minister, Mahathir Mohamad.

Mahathir was credited with engineering Malaysia's rapid modernization and spectacular economic growth. He was a dominant political figure, winning five consecutive general elections. He also used his political clout and controversial laws to detain activists and political opponents.
And Mahathir is an anti-Semite.

Back in 1970, in his treatise on Malay identity, "The Malay Dilemma," he wrote: "The Jews are not only hooked-nosed ... but understand money instinctively. ... Jewish stinginess and financial wizardry gained them the economic control of Europe and provoked antisemitism which waxed and waned throughout Europe through the ages."

In August 1984, a visit by the New York Philharmonic Orchestra was canceled when his Information Minister demanded that music by composer Ernst Bloch be deleted from the program. His crime? He was a Jew and the selection chosen was based on Hebrew melodies.

In 1986, Mahathir charged "Zionists" and Jews with attempting to destabilize the country through allegedly Jewish-controlled media. He subsequently banned The Asia Wall Street Journal for three months describing the publication as "Jewish owned." In the 1990s, Mahathir used the Malaysian news agency, Bernama, to accuse Australian Jewry of conspiring to topple him.

Mahathir, who made Islam a central component of Malaysian identity, made this chilling charge in 1997: "We are Moslems, and the Jews are not happy to see Moslems progress."

Perhaps that would help explain the resounding ovation which greeted his screed at a Islamic Leadership Conference in 2003: "The Europeans killed 6 million Jews out of 12 million ... but today, the Jews rule the world by proxy. They get others to fight and die for them."

And just last year the elder statesman of anti-Semites said this at a conference: "Jews had always been a problem in European countries. They had been confined in ghettos and periodically massacred. But they still remained and still thrived and held whole governments to ransom. ... Even after their massacre by the Nazis in Germany, they survived to be a source of even greater problems to the world."Read the entire article

European leaders on Thursday pushed through a second bailout package for debt-stricken Greece, one which includes a surprisingly high level of private participation. In addition, the euro-zone backstop fund has been given new powers, making it look suspiciously like a European IMF.

Speigel Online InternationalJuly 22, 2011

In the end, there were important resolutions to announce after all. Euro-zone heads of state and government agreed on Thursday evening to a second emergency aid package for Greece "and some other things," said German Chancellor Angela Merkel following the special summit of the 17 euro-zone member states in Brussels. She exuded satisfaction and said it had been an "important day."

In the weeks prior to the summit, Merkel had repeatedly insisted that there was no need for the special summit and she made it clear that she was not enthusiastic about participating . As recently as Tuesday, she warned that one should not expect any "spectacular" moves. And the Thursday agreement does indeed fall short of being spectacular , but it provides the clarity that was so badly needed.

The new package provides for €109 billion worth of credit for Athens. The majority of the fund comes from the euro backstop fund known as the European Financial Stability Facility (EFSF) and from the International Monetary Fund (IMF). Private creditors are to contribute an additional €50 billion by 2014 via a combination of debt buybacks and swaps. The level of private involvement in the plan is much higher than had been expected and reflects the position that Germany had been insisting on for months. It can be seen as a personal success for Merkel.

At the same time, the EFSF is to be granted additional, pre-emptive competencies to prevent the euro crisis from spreading to additional countries. Among other measures, the EFSF will have the ability to buy state bonds on secondary markets -- from banks and insurance companies for example -- in order to support debt-ridden euro-zone countries. It is a further step in the direction of the kind of transfer union that Germany has long insisted must be avoided.

A European Monetary Fund
Euro-zone leaders were eager to avoid such bond purchases becoming business-as-usual. Prior to taking such a step, the European Central Bank must identify a country's debt predicament as being extreme and all euro-zone member states must grant their approval. Each national government would hold veto rights. But the new EFSF powers meant that French President Nicolas Sarkozy also had something to celebrate. "We have agreed to create the beginnings of a European Monetary Fund," Sarkozy crowed.

The moves do indeed mean that the EFSF increasingly resembles the Washington-based IMF. It will now be allowed to grant pre-emptive lines of credit to countries under pressure on the financial markets. It will also be allowed to assist in the recapitalization of stricken banks. Even Merkel, who had long been opposed to the idea of a European Monetary Fund, allowed that "one could draw such a comparison" to the IMF.Read the entire article

Texas Congressman Ron Paul raised more than any other GOP candidate in the State of New Hampshire this quarter, with the exception of Mitt Romney, proving once again that he is a serious contender for the presidency in 2012.

Despite not conducting any major fundraising events, the Libertarian Congressman raised $33,095 from 74 donors in the first in the nation primary state.

The total far outstrips any other Republican contender, with the exception of Romney who, as it is well known, has extensive financial clout behind his campaign.

Of the other contenders, Former Minnesota Governor Tim Pawlenty emerged most successful, rasing $18,535 from 19 donors.

The rest of the pack – Former New Mexico Governor Gary Johnson, businessman Herman Cain, former Pennsylvania Senator Rick Santorum and Minnesota Congresswoman Michele Bachmann all raised less than $11,000. Former House Speaker Newt Gingrich pulled in just $1,300 from three donations.

As the Boston Globe points out, Paul even managed to raise more than president Obama, who took $25,085 from 85 donors.Read the entire article

Thursday, July 21, 2011

Loss of PrivacyJuly 21, 2011
A new house bill wants to allow the Department of Homeland Security to have jurisdiction over all federal lands on national seashores and coastal areas.

HR Bill 1505, the “National Security and Federal Lands Protection Act,” would force the Secretary of the Interior to cede authority of coastal public lands, as well as lands located along the borders of Canada and Mexico, to the Secretary of Homeland Security when the latter sees fit. It would give the Dept. of Homeland Security the ability to construct roads and fences, deploy patrol vehicles and set up “monitoring equipment” in the National Seashore with impunity. And it would waive the need for the Dept. of Homeland Security to comply with environmental laws in areas within 100 miles of a coastline or international border.The laws from which the Dept. of Homeland Security would be exempt include the National Environmental Policy Act, the Endangered Species Act, the National Historic Preservation Act, the Clean Air Act, the Coastal Zone Management Act, the Federal Water Pollution Control Act, the Migratory Bird Treaty Act, the Safe Drinking Water Act and virtually every other piece of environmental legislation passed by Congress.

[...]
This is far too sweeping legislation. It essentially allows the DHS to do whatever it wants, including destroying habitats and coastlines, all in the name of security. There would be no oversight and no recourse for anyone or anything in the affected areas.Read full article

WASHINGTON (Reuters) - The number of Americans
filing new claims for unemployment benefits rose more than
expected last week, pointing to a labor market that is struggling to regain
momentum.

Initial claims for state unemployment benefits increased 10,000
to a seasonally adjusted 418,000, the Labor Department said on Thursday.

Economists polled by Reuters had forecast claims rising to 410,000 from a
previously reported 405,000.

"We're just stuck in this trend between
410,000 and 430,000. Generally we're just really not seeing any improvement but
also not much worsening," said Jeffrey Greenberg, an economist with Nomura Securities in New
York.

Stock index futures held earlier gains after the data, while the dollar
extended losses against the euro.
The claims data covered the survey period for the closely watched nonfarm
payrolls count for July, which will be released on August 5.
Initial claims fell 11,000 between the June and July survey periods,
suggesting a modest improvement in payrolls after June's paltry 18,000 gain.
Job growth has faltered in the last two months, in line with the generally
weak tone in the economy.

A rise in layoffs held back payroll growth in
May, according to the department's latest Job Openings and Labor Turnover
Survey, which was released last week.

Layoffs were probably behind the downshift in
employment growth in June as well.

Wednesday, July 20, 2011

Transcript

Ron Paul: Mr. Speaker, the Congress is concerned about the debt, the people are concerned about the debt, the markets are concerned about the debt, the world is concerned about the debt and what we’re doing here today, because we live with a world fiat dollar standard and so the whole world is engulfed in this very serious problem.I do not understand, though, that if the debt is the problem – and I agree, the debt is the problem – that for us to come here and raise the debt by 2.4 trillion dollars is the solution. That just baffles me. I think it’s a distraction, because when a country gets indebted to the degree that we’re indebted, the country always defaults. This is historic, especially if the country is a significant country. On occasion, a small country will quit sending the checks and they’ll go bankrupt; we’re not going to do that, but we will default because the debt is unsustainable. This year it is said that we have a debt increase of 1.6 trillion dollars, but that’s not true. If you count what we borrow from the pension funds, the Social Security and highway funds, it’s 2 trillion dollars. But if you include the increase in the entitlement obligation, it’s 5 trillion dollars. So this is a huge, huge problem.But the argument here is, how do you default. And it is said that if we don’t raise the debt limit, we’re going to default and not send out the checks. I don’t believe that for a minute, somehow or another the checks are going to go out. But if you really wanted to live within the technicalities of law, there’s a very simple thing you could do. We owe the Federal Reserve 1.6 trillion dollars. Well, that’s not a real debt – they bought those treasury bills with money out of thin air. We could just write that off or quit paying the interest, tide ourselves over and get down to serious business to cut back and live within our means. And that would be a solution. But to increase the national debt will only encourage another type of default, and that’s what we’re going through. We’re engaged in the most difficult and a very bad way of defaulting; and that is through the destruction of the currency. Today we have an inflation rate of 9%, and that is defaulting. So if a government can default and print money, and if they can get a 50% inflation rate over a period of time, they’ve cut that debt in half. That is the goal, that is what’s happening, and that is very, very serious.Just in these last 3 years in dealing with this crisis, the dollar has been devalued 50% against gold, and gold, of course, is the best measurement of the value of a currency and it’s been that way for thousands of years and it cannot be denied because it’s economic law. So we are defaulting, and when the American people go out and start buying goods and services, like they are now, they’re recognizing it costs a lot of money. So right now, we’re in the early stages of rampant inflation, which means we’re going to be hit with higher prices and higher interest rates. That is going to be a tax. So I see the only solution, and that is to cut spending.Now the reason we don’t cut spending is one side loves entitlements, and the other side loves war. And even this token attempt of a 100 billion dollars of cuts when we have this huge, huge deficit… But there’s no mention of cutting military spending. I don’t want to cut defense spending. This military spending doesn’t defend us, it makes things worse. Our problem in this country doesn’t come only from the Congress, it comes from the people! The people still have a strong appetite for big government programs. They’re not willing to cut, they think government can take care of us from cradle to grave, and that we can be the policeman of the world. So someday, we as a country, we as a people, and we as a Congress, will have to say, “What should the role of government be?” The founders had a pretty strong suggestion, they wrote a constitution that said the government should be very limited, and the government should be protecting our liberties and providing national defense and a sound currency. We don’t do any of that. We’ve embarked on a course that was destined to end badly and this is where we are today. So if we don’t understand this, this default will not be because we don’t send out the checks – we will send out the checks – it will be defaulted on because people will get their money back, or they will get their Social Security checks, and it won’t buy anything. That is much, much worse than facing the fact that we not raise the debt limit and work our way out of this. That is devastating economically, and it’s devastating politically, because if we just saw a taste of what happens, how the anger is built when you see other countries in Europe now defaulting and can’t pay their bills. So this is more significant than ever, because we provide the reserve currency of the world.

Tuesday, July 19, 2011

International investor Jim Rogers expects a third round of quantitative easing by the third quarter of this year.

The head of Rogers Holdings expects this will happen "in the fall or early next year,” Rogers told CNBC, as FT Adviser reported.

"It's the wrong thing to do but that's all they [US policymakers] know to do. They are not very smart people so you better own commodities," says Rogers.

"They will see things not getting better and will do what they do."

Jim Rogers(Getty Images photo)

Rogers comments came after U.S. Federal Reserve chairman Ben Bernanke hinted the Fed might provide "additional policy support" should economic conditions warrant it, indicating that a third round of quantitative easing may be offered.

Commenting on the bond market, Rogers said "I have no idea what can cause the bond market to rally but I don't think it will rally any time soon."

"If the world economy gets better I will make a lot of money on commodities because of the shortages,” Rogers says.

"But if the world economy doesn't get better I'm probably going to make money on commodities too as they will print more money.”

In mainstream financial circles, the concept of a global currency is often spoken of only with an atmosphere of caution. It is approached always in hypothetical terms. It is whispered of as some far off dream; a socio-economic moon landing in the far reaches of fiscal space. Perhaps in 2015, or 2020, or maybe 2050, but certainly never just over the horizon, or right around the corner posing as an innocuous trade asset created over 40 years ago and used only on rare occasions. Unfortunately, the development of a centralized global security representing the creation of a supranational economic body is much closer than many would care to admit…

The most common argument made in the mainstream against a global currency taking shape is the argument that no other currency in the world today has the strength or widespread circulation necessary to replace the dollar as a primary reserve unit. This is true, if, you only look at separate currencies, and not the big picture.

The reality is, central banks and the IMF have no intention of replacing one national currency with yet another national currency as the world reserve. What they DO intend to do, however, is replace the dollar with a basket of national currencies linked together and homogenized under a single unit. This has been openly announced by the IMF for months, and Dominique Strauss-Kahn even produced a press release explaining the plan (this was before he apparently watched ‘Maid in Manhattan’ 57 times in a row then allegedly tried to “romance” a cleaning lady, which of course landed him in court):

A global currency, or at least the foundation for one, already exists in the form of “Special Drawing Rights” (SDR’s), created by the IMF in 1969 as paper collateral used to replace gold as the primary means of international trade between governments and central banks without the need for Forex exchanges. That is to say, the SDR was used as a tool for displacing the strength of gold. Today, the asset has morphed into a trade mechanism representing a basket of currencies, and, a tool to displace the U.S. dollar as the world reserve currency.

Skeptics will argue that the SDR is a “long way” from being ready to unseat the dollar, but, these economists and pundits rarely consider that the financial circumstances of markets today could quickly change tomorrow. Yes, by the standards of this very moment, a move to elevate the SDR to reserve status is impractical, mainly, because the dollar is still clinging to its relative value and widespread use. This will not be the case for much longer.

Every time the Federal Reserve engages in more quantitative easing and devalues the dollar, it is defaulting on the American people by eroding their purchasing power and inflating their savings away.

Ron Paul

Infowars.com

July 18, 2011

The debt ceiling debate is providing plenty of opportunity for political theater in Washington. Proponents of raising the debt ceiling are throwing around the usual scare tactics and misinformation in order to intimidate opponents into accepting more debt and taxes. It is important to distinguish the truth from the propaganda.

First of all, politicians need to understand that without real change default is inevitable. In fact, default happens every day through monetary policy tricks. Every time the Federal Reserve engages in more quantitative easing and devalues the dollar, it is defaulting on the American people by eroding their purchasing power and inflating their savings away. The dollar has lost nearly 50% of its value against gold since 2008. The Fed claims inflation is 2% or less over the past few years; however economists who compile alternate data show a 9% inflation rate if calculated more traditionally. Alarmingly, the administration is talking about changing the methodology of the CPI calculation yet again to hide the damage of the government’s policies. Changing the CPI will also enable the government to avoid giving seniors a COLA (cost of living adjustment) on their social security checks, and raise taxes via the hidden means of “bracket creep.” This is a default. Just because it is a default on the people and not the banks and foreign holders of our debt does not mean it doesn’t count.

Politicians also need to acknowledge that our debt is unsustainable. For decades our government has been spending and promising far more than it collects in taxes. But the problem is not that the people are not taxed enough. The government has managed to run up $61.6 trillion in unfunded liabilities, which works out to $528,000 per household. A tax policy that would aim to extract even half that amount of money from American families would be unimaginably draconian, and not unlike attempting to squeeze blood from a turnip. This is, unequivocally, a spending problem brought about by a dramatically inflated view of the proper role of government in a free society.Read the entire article

Can you smell it? There is blood in the water. Global financial markets are in turmoil. Banking stocks are getting slaughtered right now. European bond yields are absolutely soaring. Major corporations are announcing huge layoffs. The entire global financial system appears to be racing toward another major crisis. So could we potentially see a repeat of 2008? Sadly, when the next big financial crisis happens it might be worse than 2008. Back in the middle of 2008, the U.S. national debt was less than 10 trillion dollars. Today it is over 14 trillion dollars. Back in 2008, none of the countries in the EU were on the verge of financial collapse. Today, several of them are. This time if the global financial system starts falling apart the big governments around the world are not going to be able to do nearly as much to support it. That is why what is happening right now is so alarming. As signs of weakness spread, the short sellers and the speculators are starting to circle. They can smell the money.
Back in 2008, bank stocks led the decline. Today, that appears to be happening again. The "too big to fail" banks are getting absolutely pummeled right now. Most people don't have much sympathy for the banksters, but if we do see a repeat of 2008 they are going to be cutting off credit and begging for massive bailouts once again, and that would not be good news for the economy.
In Europe, the EU sovereign debt crisis just seems to get worse by the day. Bond yields for the PIIGS are going haywire. The higher the yields go, the worse the crisis is going to get.
Meanwhile, as I have written about previously, a bad mood has descended on world financial markets. Pessimism is everywhere and fear is spreading. The short sellers and the speculators are eager to jump on any sign of weakness. Investors all over the globe are extremely nervous right now.
So what happens next?
Well, nobody knows for sure.
But things certainly do not look good.
The following are 18 signs that global financial markets smell blood in the water....#1 Banks stocks are absolutely getting hammered right now. Bank of America hit a 52 week low on Monday. Bank of America shares declined 4 percent to $9.61.#2 So far this year, Bank of America stock is down about 27 percent.#3 Bloomberg is reporting that Bank of America may be forced to increase its capital cushion by 50 billion dollars.#4 Shares of Goldman Sachs and Morgan Stanley are near two year lows.#5 Shares in Citigroup fell 2.5 percent on Monday.#6 Moody's recently warned that it may be forced to downgrade the debt ratings of Bank of America, Citigroup and Wells Fargo.#7 Barclays Capital, Goldman Sachs, Bank of America, JPMorgan Chase and Morgan Stanley are all either considering staff cuts or are already laying workers off.#8 The deputy European director of the International Monetary Fund says that the Greek debt crisis is "on a knife's edge".#9 Moody's has slashed Ireland's bond rating all the way to junk status.#10 The yield on 2 year Portuguese bonds is now over 20 percent, the yield on 2 year Irish bonds is now over 23 percent and the yield on 2 year Greek bonds is now over 35 percent.Read the entire article

While being stationed in Germany, I had the opportunity to visit the German Concentration Camp Dachau. This was in 1989, and I was only 20 yrs old at the time. Our Unit had a field trip that day to visit the site, and as we walked into the camp, I began to try and imagine the pain and suffering that took place behind the barb wired fences, and within the gas chambers that were built there.

Dachau was the first Nazi Concentration Camp opened in Germany, and the year was 1933. Heinrich Himmler, Chief of Police of Munich, officially described the camp as "the first concentration camp for political prisoners".[1] Of course, at the time of my visit I was young and not very knowledgeable as to the horrific events that took place, not only in this camp, but in others as well.

We were initially greeted as we entered the camp with the words "Arbeit Macht Frei" written upon the gate where thousands before entered. "Work Brings Freedom" was the deceptive promise of the gate, and I wondered how many of its occupants believed what it offered. It must have been horrifying to walk into this camp, not knowing what it truly was offering. Many would find out as time went on.

As we toured through the camp, we came upon a grave site area upon which a plaque was inscribed with the words "Tomb of the many thousands unknown " or something close to those words. It slowly began to sink in to my heart, all the misery and pain, that was inflicted - from human to human - pain and terror that most of us in these times have probably never imagined, let alone seen.

History may never know how many people were interned there or died there, due to periods of disruption. One source gives a general estimate of over 200,000 prisoners from more than 30 countries for the Third Reich's years, of whom two-thirds were political prisoners and nearly one-third were Jews. 25,613 prisoners are believed to have died in the camp and almost another 10,000 in its subcamps,[6] primarily from disease, malnutrition and suicide. In early 1945, there was a typhus epidemic in the camp due to influx from other camps causing overcrowding, followed by an evacuation, in which large numbers of the weaker prisoners died. Toward the end of the war death marches to and from the camp caused the expiration of large but unknown numbers of prisoners. Even after liberation, prisoners weakened beyond recovery continued to expire. [2]

All of the housing units had been torn down due to the disease and unsanitary conditions within the buildings. There was only one still remaining, and that particular one was a rebuilt replica. I walked through that dingy place and could almost hear the crying and dispair that dwelt there more than 40 yrs before. It was hard to hold back tears, and by the end of the tour I don't think there was a dry eye in the group. It didn't matter whether we were Jewish or not. It was the thought of the brutality that could be inflicted upon one group of people by another that really disturbed me.

Over its twelve years as a concentration camp, the Dachau administration recorded the intake of 206,206 prisoners and 31,951 deaths. Crematoria were constructed to dispose of the deceased. These numbers do not tell the entire story, however. Although there is no evidence of mass murder within the camp itself by other methods than poor sanitation, deprivation of medical care, withholding of nutrients, medical experiments, and beatings and shootings for infractions of the rules or at random, beginning in 1942 more than 3166 prisoners in weakened condition were transported to Hartheim Castle near Linz and there were executed by poison gas for reason of their unfitness. In 1941 and 1942 an unknown number of prisoners of war from the Soviet Union were executed by shooting at the camp's surrounding firing ranges, some for target practice and for sport. [3]

When I walked away from that place, I walked away with the feeling that the world is not the world I'd imagined before coming there. Before this experience, I always felt that people were basically good, and that governments and nations were humanitarian. But after learning of the length of time that these camps existed, and how many of the Allied countries, including the great United States, knew of their existance as the war progressed, the more I began to see that there certainly was evil in the world, and that governments were in most cases responsible for most of it.

This program paved the way for the Holocaust in several important ways. First, it had the effect of legitimizing government-sponsored killing. In keeping with the Nazi emphasis on racial purity, eugenics and national health, euthanasia was presented as a necessary program for eliminating those who carried defective genetic materials which might endanger the quality of the "Aryan" stock.

Second, it was the beginning stage in the corruption of the German medical profession. Robert J. Lifton [Nazi Doctors] asks the question: How did a profession committed to healing, the protection of human life and the relief of human suffering become part of the Nazi killing machine? The apparent answer to this question is that it was a gradual process, a "slippery slope" which began with the Euthanasia Programme of "mercy killing" and resulted in the full scale involvement of some members of the medical profession in the mass extermination of Jews and others in the Nazi death camps.

Third, the T-4 program was crucial in developing the technology which would later be applied to mass murder. [4]

With the turmoil developing in all countries around the globe, I wonder how long it will take for the conditions to be ripe once again for these atrocities to be resurrected? Here in the U.S. we seem to be on the road to a possible form of National Socialism that Hitler dreamed of as he went forth conquering. Our president has promised to turn us from the devastating effects of a Republican induced economic crisis, (these were his words in a recent speech) and to bring national healthcare to all in the U.S., whether a citizen or not. This healthcare bill however, seems to me, to be the launching pad for another "T-4" type of program that ultimately caused the death of thousands of innocents in Nazi Germany.

The T4 Euthanasia Program was a Nazi German effort --framed as a euthanasia program-- to kill incurably ill, physically or mentally disabled, emotionally distraught, and elderly people. Adolf Hitler initiated this program in 1939, and, while it was officially discontinued in 1941, killings continued covertly until the military defeat of Nazi Germany in 1945.

In October 1939, Adolf Hitler empowered his personal physician and the chief of the Chancellery of the Führer to kill people considered unsuited to live. He backdated his order to September 1, 1939, the day World War II began, to give it the appearance of a wartime measure. In this directive, Dr. Karl Brandt and Chancellery chief Philipp Bouhler were "charged with responsibility for expanding the authority of physicians…so that patients considered incurable, according to the best available human judgment of their state of health, can be granted a mercy killing."

Within a few months, the T4 Program --named for the Chancellery offices that directed it from the Berlin address Tiergartenstrasse 4-- involved virtually the entire German psychiatric community. A new bureaucracy, headed by physicians, was established with a mandate to kill anyone deemed to have a "life unworthy of living." Some physicians active in the study of eugenics, who saw Nazism as "applied biology," enthusiastically endorsed this program. However, the criteria for inclusion in this program were not exclusively genetic, nor were they necessarily based on infirmity. An important criterion was economic. Nazi officials assigned people to this program largely based on their economic productivity. The Nazis referred to the program's victims as "burdensome lives" and "useless eaters." [5]

I know that the comparison might seem a bit outlandish, but I'm sure those living in Nazi Germany also initially felt as if there was nothing wrong with the reforms Adolf Hitler was instituting in the Fatherland in order to bring about a New World Order[6] for the Aryan people. Could our physicians be turned into the monsters that commited such atrocities in Nazi Germany?

The transformation of physicians into killers took time and required the appearance of scientific justification. Soon after the Nazis came to power, the Bavarian minister of health proposed that psychopaths, the mentally retarded, and other "inferior" people be isolated and killed. "This policy has already been initiated at our concentration camps," he noted. A year later, authorities instructed mental institutions throughout the Reich to "neglect" their patients by withholding food and medical treatment.

Pseudoscientific rationalizations for the killing of the "unworthy" were bolstered by economic considerations. According to bureaucratic calculations, the state could put funds that went to the care of criminals and the insane to better use&emdash;for example, in loans to newly married couples. Proponents for the program saw incurably sick children as a burden on the healthy body of the Volk, the German people. "Wartime is the best time for the elimination of the incurably ill," Hitler said. [7]

And of course, let's not forget that currently accross America, Internment Camps are being built. Will these be for political prisoners when the final stages are implemented in bringing about the long awaited dream of a NewWorldOrder?

The bible says " There is nothing new under the sun". I only hope in this case we who understand the coming events will stand up without fear to warn others of this very real possibility. Winston Churchhill once said “Those that fail to learn from history, are doomed to repeat it.” We have the history behind us, and we see the trends that are developing toward a similar scenario if we fail to learn and avert it.

Monday, July 18, 2011

Egan-Jones Ratings Co. cut its rating on the U.S. by one step to AA+ from AAA,
citing the high level of debt outstanding relative to other countries and
concern that politicians may fail to reduce spending.

“The major factor driving credit quality is the relatively high level of debt
and the difficulty in significantly cutting spending,” the firm said July 16 in
a report. Egan-Jones placed the U.S. on negative watch on March 1.

Republicans are using talks to increase the $14.3 trillion debt-ceiling to
press for cuts in spending. Treasury Secretary Timothy F. Geithner has said the
government, which reached its borrowing limit on May 16, will run out of options
to prevent a default on Aug. 2. The most likely outcome of the negotiations is
that the federal government will fail to reduce its debt to gross domestic
product “in any sort of meaningful fashion,” said Sean Egan, president of
Egan-Jones in Haverford, Pennsylvania.

“We’ll muddle along, we won’t decrease the debt to GDP,” Egan said today on
Bloomberg Television’s “Street Smart” with Carol Massar. “Then we’ll be faced
with the crushing blow of the baby boomers retiring.”
Moody’s Investors Service and Standard & Poor’s have put the U.S. debt
rating on review for downgrade.
--Editors: Paul Cox, Dave Liedtka

Sunday, July 17, 2011

Daniel TaylorOld-Thinker NewsJuly 15, 2011World Population Day was celebrated Monday July 11, as it has been every year since 1989. Propaganda spewed from the United Nations and other “green” organizations tell us that our carbon footprint needs to be reduced, we are having too many children, and our energy consumption needs to be cut in half.This propaganda is for the ignorant general public that will follow along with trendy ideals that are cloaked with false righteous indignation. The organization Planetsave tells us, “Cut your carbon footprint and consider having a smaller family. In the United States, the carbon legacy and greenhouse gas impact of an extra child is almost 20 times more important than all of the “green” practices you might employ in your entire lifetime…”
Something must be done immediately to curb human population growth, we are told. We should all feel guilty for having more than one child. In reality a conscious and deliberate campaign to depopulate the world has been ongoing for at least a hundred years – and its working; So much so that Deutsche Bank issued a report in May of this year warning that the human population globally will no longer be replacing itself by the 2020′s. As the report states,

“In our view, the human race will no longer be replacing itself by the early 2020s. Population growth will continue for a few more decades because of momentum from the age structure and people living longer but, reproductively speaking, our species will no longer be growing. This will be one of the most important turning points in history.”

Americans need to work on average 10 years longer to pay off the country's mounting debts, says Philippa Malmgren, a former economic adviser to George W. Bush and founder of Principalis Asset Management.

"Will the U.S. go into technical default? This is quite possible," Malmgren tells CNBC.

"It is a serious problem, but the U.S. can easily fix it by having everybody work 10 years longer, which they'll do anyway."

Government debt issues have been grabbing headlines lately.

The U.S. has hit its $14.3 trillion debt ceiling and Congress must approve lifting that ceiling.

(Getty Images photo)

Republicans and Democrats want to lift the ceiling, but Republicans want no tax hikes as part of the deal to narrow deficits while Democrats are against some spending cuts.

Focusing on eventual recovery, Malmgren says manufacturing, agriculture and innovation will fuel economic recovery, although banks need to step it up a bit and lend more.

"I think lending in the U.S. is a great business with great returns. If big banks cannot and will not lend then are there smaller local banks who will Hoover up the best loans," she says.

Moody's has threatened to yank the country's AAA credit rating if it defaults, which would come after an Aug. 2 deadline.

"What has been beginning to spook Moody's and some other people is that Congress may be dumb enough to actually default on the debt," says Cliff Draughn, chief investment officer at Excelsia Investment Advisors in Savannah, Georgia, Reuters reports.

Rebekah Brooks, the former head of media mogul Rupert Murdoch's British operations, was arrested Sunday in connection with a spiraling phone-hacking scandal, police and media reports said.

Scotland Yard confirmed that a 43-year-old woman was arrested at noon on suspicion of conspiring to intercept private voicemails and corruption allegations. British media identified the woman as Brooks.

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